Bengaluru: Indian shares fell on Tuesday, dragged down by stocks of Tata Group companies after Cyrus Mistry was ousted as chairman of salt-to-software conglomerate Tata Sons, in a move that caught markets by surprise.
Also read: Tata Sons remove Cyrus Mistry as chairman, Ratan Tata is interim chief
Tata Sons, which is a large shareholder in a string of listed Tata Group companies, announced late on Monday that Ratan Tata would replace Cyrus Mistry as chairman in the interim.
While the Tata Sons' board gave no detailed reason for the change, some media reports said there has been discontent with some of Mistry's actions, including asset sales.
Among the Tata Group companies, Tata Steel was the top percentage loser on the broader NSE index, shedding 2.7 percent, while others such as Tata Power, Tata Consultancy Services and Tata Motors also dropped between 1 and 2 percent.
"Investors are basically exercising caution due to the uncertainty surrounding the sacking," said Mugilan. K, deputy manager of research at Cholamandalam Securities."We are mostly seeing short-term trading on Tata stocks as traders are looking to book profit because of the situation.
However, this is not likely to sustain for a long period."Sentiment was also cautious ahead of the quarterly results of heavyweights such as HDFC Bank and Kotak Mahindra Bank, scheduled later in the day. Stocks of the two banks fell between 0.5 percent and 1 percent.
The broader Nifty 50 index was down 0.3 percent at 8,683.05 as of 0520 GMT, while the benchmark BSE index was trading 0.39 percent lower at 28,068.India's third largest telecom operator, Idea Cellular Ltd fell as much as 3.6 percent after reporting an 88 percent decline in September-quarter profit on Monday.
Bharti Infratel Ltd however rose as much as 3 percent after the telecom tower infrastructure provider reported a 21 percent increase in net profit during the September quarter.
(With agency inputs)